The Problem With Naming a Trust as the Beneficiary of an Annuity

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3 Tips for Avoiding Disastrous Trust Beneficiaries for IRAs

Naming a trust as beneficiary can be compelling for clients who want to control how their heirs use the assets. However, trusts can be limiting—especially as circumstances change. These three tips can help clients determine if a trust is the right solution for their estate-planning needs.

Myth Buster: Actually, IRAs Can Be a Great Place for Annuities!

It’s an old rule of thumb that investors shouldn’t locate annuities in their retirement accounts. And that was a good rule when tax deferral was the only goal. But these days clients most often buy annuities for their retirement income guarantees—and guarantees can make sense anywhere clients are worried about their retirement assets, including IRAs.

The Crossover Zone: How IRA Withdrawals Can Trigger the 3.8% Medicare Surtax

Horsesmouth Essential: While retirement distributions are not considered investment income for tax purposes, the reality is that a withdrawal can indirectly trigger the additional 3.8% surtax if there is enough existing investment income. At that point, investors have entered the “crossover zone”—which offers income shifting and tax planning opportunities for proactive advisors.

Owning Deferred Annuities in Trusts and Preserving Tax-Deferral Treatment

Holding deferred annuities within trusts and preserving favorable tax treatment can be complicated. Be especially cautious about the pitfalls of transfers into and out of trusts, which can result in immediate recognition or continued deferral of the gains depending on the type of trust and its beneficiaries.